The Central Bank of Nigeria (CBN) has vowed to revoke for a year the foreign exchange operating licence of any bank that engage FX malpractices
The apex stated this in a circular entitled, “Observance of due diligence in the processing of foreign exchange transactions” which was signed by its Director of Trade and Exchanges Dr. O.S Nnaji.
A stern warning is coming amid the bad performance of the naira against the US dollars and other major currencies in the market.
The warning reads:
In line with our continuing close surveillance of our financial markets in general and the FX market in particular, the CBN wishes to remind all banks that it is their responsibility to not only Know their Customers (KYC requirements) but also Know their customers’ business (KYCB – requirements).
At the time of this report, the CBN official exchange rate of US dollar to naira was N410.48 while it was N545 at the parallel market popularly known as the black market rate in Nigeria.
The forex market has not been favourable to the naira since July 27, when Godwin Emefiele announced the suspension of sales of dollars to Bureau De Change operators.
Before the stoppage which we highlighted the implications of such actions in one of our guides, CBN was selling $20,000USD each to the 5,500 official BDC operators in the country weekly.
The apex bank subsequently announced that the weekly sales of FX would be directed to banks that have FX operating licence.
It also mandated the banks to establish Forex Teller Points in their branches where Nigerians who need FX for PTA, BTA, foreign medical bills, and payment of foreign school fees can access.
There were guidelines for accessing PTA, BTA, and others, but CBN later revealed that some customers access PTA through fake tickets and visas, violating the rules.
Nnaji says, “We wish to reiterate that the FX operating license of any bank or banks that are found culpable with ongoing investigations would be suspended for at least one year.”
BDC operators who in the first week of the sanction boasted of other FX sources are now lamenting that the policy will lead to the loss of over 40,000 jobs in Nigeria.
At the close of business on Friday, September 10, 2021, $1 was N545; €1 was N636; £1 was N743 at the parallel market.